After six and a half years spent working closely with ASIC to get it right, a first-of-its-kind product and accompanying training course have launched, enabling financial advisers to help Australians access the equity stored in their home.
DomaCom CEO, Arthur Naoumidis explained, “Senior Equity Release is the first financial product in this space that will give financial advisers a significant place at the table in a growing and vulnerable sector that in many cases is asset rich and cash poor.”
Other means of equity release made available in the past were structured as credit or real estate products, excluding distribution by those without the appropriate licenses required.
To address this, DomaCom has spent nearly seven years securing the necessary reliefs from ASIC to launch its new product, conducting consumer testing and undergoing a substantial review by the regulator.
Naoumidis says the accreditation is “crucial because this is unlike any product that’s ever existed.”
The training created as a result of the extensive screening is comprised of lessons and tests focused on how the product works, with an emphasis on how to accurately analyse whether the solution is appropriate for the retiree in question.
DomaCom’s new offering allows seniors to sell a fraction of their home to get either an income stream or a lump sum, without having to relocate from their property. When it is eventually sold in full, the vendor and investors receive their share of the sale price.
“For retirees, the alternative is to downsize by selling the whole house. Clearly, this is not a good time to do that. Through our product, if you’re trying to release equity, you can effectively downsize by selling just a bit of your house to investors,” explained Naoumidis.
“In Australia, we’ve got a very large problem with baby boomers hitting retirement. Superannuation came too late for them to build up balances. Instead, they have their house.
“The feedback from a lot of advisors is that all of them have clients, if not members of their family, that need this product,” he concluded.